China: WTO Changes Must Support Developing Countries

China will go along with changes meant to update global trade rules so long as they protect Beijing’s status as a developing country, a Cabinet official said Friday.

The deputy commerce minister, Wang Shouwen, said any changes also must address protectionism and abuse of export controls and security reviews — a reference to Beijing’s trade clash with U.S. President Donald Trump.

China agreed in June to work with the European Union to propose changes to the World Trade Organization to address technology policy, subsidies and state industry — all areas in which Beijing faces complaints. U.S. officials complain the global trade referee is too bureaucratic and slow to adapt to changing business conditions.

Wang said each country’s “development model” must be respected — a reference to China’s state-dominated economy, which has provoked repeated complaints Beijing is violating its market-opening obligations.

Beijing has accused Trump of wrecking the global trading system by going outside the WTO to hike tariffs on Chinese imports. Trump says that was necessary because the global body is unable to respond to complaints about Chinese technology theft, subsidies and state-led industry development.

China is “willing to assume obligations” that are “compatible with our own level of development,” Wang said at a news conference.

“We will not allow other members to deprive China of the special and differential treatment that developing members deserve,” he said.

Wang gave no details of changes Beijing might support. But he said they also must address agricultural subsidies — a frequent complaint by developing countries against industrialized economies — and “discrimination against state enterprises,” a reference to restrictions on Chinese government companies abroad.

Beijing’s insistence that it is a developing country and entitled to special protections despite having grown into the second-largest global economy and a major manufacturer rankles its trading partners. That might dampen chances of reaching agreement on WTO reforms that would satisfy the United States, Europe and other governments.

Other governments dislike Trump’s tactics but echo U.S. complaints about Chinese market barriers and technology policy.

Washington and Beijing have imposed penalty tariffs on billions of dollars of each other’s goods in their dispute over U.S. complaints that China steals or pressures foreign companies to hand over technology.

The United States, Europe and other governments also object to Chinese plans including “Made in China 2025” for state-led creation of competitors in robotics and other technology. American officials worry those might erode U.S. industrial leadership.

The EU filed a WTO challenge in June to Chinese rules on technology licensing that it said improperly discriminate against foreign companies.

Trump and his Chinese counterpart, Xi Jinping, are due to meet this month in Buenos Aires during a gathering of the Group of 20 major economies. Private sector analysts say there is little chance that meeting by itself will produce a settlement.

Wang, the commerce official, gave no details of Xi’s possible negotiating stance. But he said China hopes G-20 members can have an “effective discussion” about WTO reform.

“China hopes the G-20 meeting can support the multilateral trading system (and) oppose unilateralism and trade protectionism,” he said.

Wang warned that an issue that “endangers the WTO’s existence” is the status of judges to mediate disputes. The Trump administration has blocked the appointment of judges to the WTO’s appeal body, leaving only three members on the seven-seat panel.

That is a dispute “between the United States and all other WTO members,” said Wang. “We believe this should be resolved as soon as possible.”